Reflections on putting life insurance in place for a child.

There are many things most people would rather talk about other than the possible death of their child and looking at putting insurance in place, for that purpose, but what would you do if the unthinkable happened?

It has been my experience that insuring a child at a young age is very smart and responsible thing to do, on the part of the Parent or Grandparent.
Whole Life Insurance increases in cost as you age and is never as cheap as when you are younger. With each passing year the price goes up. Therefore the younger you are at issue the more money your child saves in their long term plan.

In my personal case my Nephew was diagnosed with Aplastic Anemia at the age of 24 and therefore became uninsurable. If he had Insurance in place as a child he would not have that concern now. However he is faced with an inability to obtain life insurance coverage now when he needs it the most. There are many things that can happen in your childhood that may prevent you from being insurable or rate you at a higher cost. Not to mention how happy I would have been if my parents had presented me with a whole life insurance policy paid up. In reality I also am faced with insurance concerns now. You see, being Diabetic with a Heart condition means that I myself am uninsurable. I am grateful for the insurance that I did put in place, prior to becoming uninsurable and have future insurability riders.

As a result, both my daughters have $100,000 whole life policies that I took out when they were very young. I structured them in such a way that my wife and I will have them all paid up within a fixed number of years and provides a “line of credit” on their insurability later.

I can not stress enough the importance of Life Insurance for children, for the foundation of a long term financial plan.

Paul Howard, Financial Advisor